Thursday, December 1, 2011

Natural Gas: "What the Frack: Gazprom Goes Green"

Although I had this post ready to go yesterday, I have the attention span of a gnat and spaced it.FT Alphaville reminded us so here's a big 'ol hat tip ma'am.
Here are some of our posts on the verde side of Gazprom:

But in a sign the phenomenon is in fact being taken
seriously, the board of directors at the world’s biggest gas producer,
state-owned OAO Gazprom, this week highlighted environmental risks and
the high costs of production in Europe.
“The production of shale gas is associated with significant
environmental risks, in particular the hazard of surface and underground
water contamination with chemicals applied in the production process,”
Gazprom said in the statement following the board meeting.

Now surely, this has absolutely nothing to do with the fact that
expanded gas production, especially in Europe, would be devastating for
Gazprom. The experience in the US shows how quickly the gas market can
turn. In 2006, the consensus prediction was that the US was facing a
low supply-high price gas future, and that the country would be a gas
importer. Gas prices were well north of $10/mmbtu. A few short years
later, the US supply situation was turned on its head. Gas prices are
now in the mid-$3/mmbtu range, and the play of the day is to figure out
how to export gas to Europe and Asia.

LNG sourced from the Middle East or the US is already a
near-to-medium term threat to Gazprom, as the ongoing disconnect between
gas prices and oil prices (which determine the price of Gazprom gas
under its long term contracts) indicated. Even a modest increase in
production in Europe would put even more pressure on the company. And
as the US experience shows, that increase can take place extremely
rapidly (though for a variety of reasons such speed is unlikely in
Europe)....MORE

...Setting Gunvor aside, both of the oil and gas
companies are down considerably from their YE '07 market caps: 4 1/2%
of Gazprom is worth around $6 billion while 37% of Surgutneftegaz
clocks in at $12 1/2 bil....

RuLeaks, a WikiLeaks type site owned and operated by the Russian Pirate Party, was shut down
by a denial of service attack yesterday after posting photos of a
lavish mansion alleged to be Prime Minister Vladimir Putin's estate on
the Black Sea. The site, and the photos, are now back up.

The existence of the "Putin palace" on the Black Sea was discussed by the Washington Post's David Ignatius in an article last year.
According to Russian whistleblower Sergey Kolesnikov, the still
under-construction digs cost more than $1 billion, include an
amphitheater and three helipads and is being "predominantly paid for
with money donated by Russian businessmen."....